When a company delivers a positive earnings report and increases its outlook for the full year, it’s usually a good bet that its stock will garner some buyers. But when a stock initially rallies on the news only to spend the rest of the day falling on heavy volume, we can surmise that something is not right. That’s exactly what happened to Darden Restaurants (NYSE: DRI) on Tuesday. #-ad_banner-# The restaurant operator announced better-than-expected earnings before the bell, increased its outlook and announced a new $500 million buyback plan. The stock instantly jumped more than 4% from Monday’s close. But… Read More
When a company delivers a positive earnings report and increases its outlook for the full year, it’s usually a good bet that its stock will garner some buyers. But when a stock initially rallies on the news only to spend the rest of the day falling on heavy volume, we can surmise that something is not right. That’s exactly what happened to Darden Restaurants (NYSE: DRI) on Tuesday. #-ad_banner-# The restaurant operator announced better-than-expected earnings before the bell, increased its outlook and announced a new $500 million buyback plan. The stock instantly jumped more than 4% from Monday’s close. But it was all downhill from there. By Tuesday’s close, shares had given up nearly all of those gains, closing up just 0.6%. While the media will report it as a gain on positive earnings news, the charts say otherwise. Bad action on good news is bearish. DRI, as well as a good deal of the restaurant sector, has been in a decline since the summertime. Darden peaked in June and fell through mid-July before settling into a sideways range. But within that range there were clues to suggest there was more pain ahead. First, the… Read More